130 The value of the firm is: V = 0.5 × (150 + 20 + 37) + 0.5 × (40 + 70 + 37) = 177 The value of equity is: E = 177 − 130 = 47 The firm should go ahead with the merger. 2. a) Project A has an expected payoff equal to 85. Project B’s expected payoff is: 0.5 × 150 = 75 Project C’s expected payoff is: 0.1 × 350 + 0.9 × 25 = 57.5 b) With debt at face value 35 million due in one year‚ the value of equity for each of the three projects is: EA = 85 − 35 = 50 EB = 0.5 × (150 − 35) = 57.5 EC = 0.1
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CCS insight CCS Insight Report making sense of the connected world Global Smartphone Market Analysis and Outlook: Disruption in a Changing Market June 2014 Table of Contents 1: Executive Summary ................................................................................... 3 2: Global Smartphone Market Size and Value ....................................................... 4 3: Competitive Landscape Dynamics .................................................................. 6 Overview
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with Boeing in the development of the VLCT? | | Airbus | | | Develop VLCT | Don’t Develop VLCT | Boeing | Develop VLCT | Massive losses for both (-‚-) | Continued monopoly for Boeing‚ no gains for Airbus(+‚0) | | Don’t Develop VLCT | Duopoly in the VLCT market (0‚+) | Boeing maintains VLCT monopoly‚ no gains for Airbus (0‚0) | * Doesn’t make sense for Boeing because market isn’t there (need 400 to break even yet market size is capped at 300) * Substitute (cannibalization) of
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such as Coca-Cola Enterprises (CCE) and Pepsi Bottling group (PBG). Thus it is very difficult for a new concentrate producer entering the market to find any bottler who will distribute their product. Industry Rivalry The CSD is an oligopoly/duopoly environment. From the high concentration ratio indicated by the high concentration of market share held by the largest firms‚ rivalry within industry is low‚ yet the rivalry between Pepsi and Coke is at high level competition based on price and brand
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Question No. 1 A survey to collect data on the entire population is a census a sample a population an inference Question No. 2 A portion of the population selected to represent the population is called statistical inference descriptive statistics a census a sample Question No. 3 Qualitative data can be graphically represented by using a(n) Options histogram frequency polygon ogive bar graph Question No. 4 Fifteen percent of the students in a school of Business Administration
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conjectural variations‚ market shape‚ consumer behavior and transportation costs are not taken into account. By using the principle of minimum differentiation and the location model‚ Hotelling wanted to show that price stability was possible within a duopoly without conspiracy (Brown‚ 1989). H2) Discuss weaknesses of Hotelling’s model. After the publication of Hotelling’s paper (‘Stability in Competition’)‚ a lot of research has been done into the principle of minimum differentiation (Brown‚ 1989)
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Paramount 1994 1.) On December 14‚ Paramount’s board dropped the merger agreement with Viacom and agreed to hold an auction for control of Paramount. The implication of this move was that although Paramount would endorse one of the two bids‚ the shareholders’ tender decisions ultimately would decide the winner. 2) 3.) (Refer Chart “Stock Price Movements” in appendix.) Before the announcement‚ (on September 7)‚ Paramount stock traded at $55.875 per share. From that point‚ Paramount stock reached
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they are considered as future expenses (after the sales occur). Please see below for the decision tree. 2. Maximization of Expected Monetary Value as a criterion The average or expected payoff of each alternative is a weighted average: the state of nature probabilities are used to weight the respective payoffs. ¹ Therefore the expected monetary value for each alternative is as follows: EMVp2 = $ 6‚000 EMVp4 = $
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Oligopoly After reading this chapter‚ you should know: 1. The unique characteristics of oligopoly. 2. How oligopolies maximize profits. 3. How interdependence affects oligopolists’ pricing decisions. Problems for Chapter 10 1. Suppose the automobile market in the U.S. is divided as follows: General Motors 28% Ford 23% Toyota 18% Daimler-Chrysler 16% All others 15% a) What is the four firm concentration ratio? b) What is the approximate Herfindahl-Hirschman
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performance state) be P(H) = 0.5 Let the probability of state 2 (the low performance state) be P(L) = 0.5 We assume that the amount of utility or satisfaction Ajay derives from a payoff is equal to the square root of the amount of the payoff. So‚ we get Ui(a) = √x‚ x≥0 Where x is the amount of the payoff The decision theory tells us that the act with the highest expected utility should be chosen. We denote the expected utility of act a1 (AB Ltd.) by EU(a1) and the expected utility
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